PM Daily Market Commentary - 6/12/2017

davefairtex
By davefairtex on Tue, Jun 13, 2017 - 4:58am

 

Gold fell -0.90 to 1267.90 on moderate volume, while silver dropped -0.23 to 16.95 on very heavy volume. Gold traded sideways within a range, while silver just steadily sold off, paralleling a move down in copper.

Not much happened today in gold; although gold made a new low to 1265.60, it was a very minor dip down. The trading range today was narrow, but ultimately the short black/spinning top candle print probably did not mark a low.

Open interest at COMEX for GC fell -548 contracts.

Rate rise chances (June 2017) remain at 99%.

Silver had no buyers today – prices moved relentlessly lower, breaking through round number 17 and closing near the lows of the day. The long black candle was not bullish; this probably isn't the low yet for silver. Silver is not yet oversold.

Open interest at COMEX for SI rose +223 contracts.

The gold/silver ratio rose +0.97 to 74.82. The rising gold/silver ratio is a bearish sign.

Miners acted very strangely today; GDX fell -0.39% on moderate volume, trading sideways within a range, while GDXJ rallied sharply, up +2.35% on moderate volume. The move in GDXJ was striking, as the junior miner ETF moved up strongly in spite of the range-bound behavior of its larger cousin, and the relentlessly falling silver prices. The print for GDX was a southern doji, which the code found neutral. The GDXJ print was a bullish engulfing, which was also (surprisingly) neutral. The junior miners continue to recover; the GDXJ:GDX ratio has been climbing steadily since the beginning of June. This would normally be a bullish sign, but I think its just an artifact of the GDXJ readjustment due to occur in a few days. Still, if you own junior miners, things are looking up.

Platinum rose +0.45%, palladium shot up +2.13%, and copper fell -1.15%. Palladium is breaking out to new closing highs, while copper's bearish engulfing candle print looks somewhat ominous, with a 51% chance of marking the top. If copper tips over and starts to sink, it probably won't help silver.

The buck fell -0.17 to 96.87, however the move down did not seem to help gold or silver very much. Candle print for the buck was a swing high, but the code did not think it looked all that bearish. To me it looks more as if the buck found support on its 9 EMA; I believe the dollar uptrend remains in place, at least for now. The Pound continued to plummet, down -0.72% to 126.58. BRExit may mean BRExit, but its not clear that PM May will be in office long enough to see it through. CAD shot +1.09% higher on some remarks by a BOC governor who expressed optimism in the Canadian economy (GDP growth: 3.7%); rates up north have been at 0.5% since 2015. Rate increases are currency-positive.

Crude rallied +0.11 to 46.12; it was essentially a failed rally, with crude printing a shooting star candle on the day. Code thought that the print wasn't all that bearish, however. Tomorrow we have the API report after market close. Is oil ready to rally yet? Last week an unexpected inventory build caused oil to crater – sometimes its more instructive to see the market's reaction to the report rather than focus on the details of the report itself. We'll get a hint of the market's directionality following tomorrow's report.

SPX fell -2.38 to 2429.39, more or less unchanged on the day. Tech led the market lower (XLK:-0.59%) as it did on Friday, while energy did best (XLE:+0.71%). The tech sell-off may have lasted all of two days; today's candle print for XLK was a hammer, which the code felt had a 68% chance of marking a low. XLK found support on its 50 MA.

VIX rose +0.76 to 11.46.

TLT fell slightly, dropping -0.03%. TLT tried rallying, but the rally failed. The shooting star candle print was not bearish according to the code. TLT remains just below its 200 MA.

JNK rallied +0.27%, printing a swing low and suggesting a move back to risk on.

CRB fell -0.48%, with 4 of 5 groups falling today led by livestock & agriculture. Commodities look as though they are ready to break down once again.

It's Central Banking Week this week; FOMC announces Wednesday, BOE on Thursday, and BOJ on Friday. Gold seems to have a history of being weak going into FOMC meetings, and rallying afterwards, but this one might be different. If the Fed talks more concretely about reducing the balance sheet, this would be bearish for PM – and likely for bonds too.

We also have Retail Sales on Wednesday, and Industrial Production on Thursday.

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3 Comments

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 63
Bearish flag?

Looks like a flag forming in silver...

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 63
Looking for a bounce off

Looking for a bounce off $17.00 in the next two hours, then we should have a red day...

PeakGold's picture
PeakGold
Status: Bronze Member (Offline)
Joined: Jun 3 2017
Posts: 63
Looking for a bounce off

Looking for a bounce off $17.00 in the next two hours, then we should have a red day...

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